737 Max development cost to be twice A320neo: report

24 January, 2012

SOURCE: Air Transport Intelligence news

BY: Jon Ostrower

Washington DC

With a greater level of structural modification required to accommodate new CFM International Leap-1B engines, Boeing's cost to develop the re-engined 737 Max is to be double that of Airbus, estimated a new report.

The 737 Max's lower ground clearance requires that the 173cm (68in) Leap-1B engine "must move farther up toward the wing," said the 23 January report from Bernstein Research.

"We understand that at [the engine's] proximity to the wing, important modifications (pylon and fuel tank) were made to address the risk of a blade out potentially puncturing the fuel tank," said the report.

"With a heavy engine positioned in front of the wing, combined with the longer nose gear, we believe that the design is more complex than that for the A320neo, which is mainly about strengthening the wing and wing join (also necessary on the 737 Max)," it added, concluding: "We expect development costs for the 737MAX to be roughly double those for the A320neo."

Further, Boeing is also adding fly-by-wire spoilers to the aircraft along with a re-lofted and re-shaped tail cone, as well as eliminating a structural body join.

Despite development challenges for both Boeing and Airbus, Bernstein said they are greater for Boeing, but ultimately manageable by both airframers.

Bernstein concluded the Next Generation 737 today is "roughly 4-5% more fuel efficient than the A320".

But the A320neo, which offers a choice of Leap-1A or Pratt & Whitney PW1100G engines and sharklets, is expected to decrease the Airbus narrowbody's fuel burn performance deficit with the 737 by one to four percentage points.

The A320neo powered with PW1100G engines will enter service with Qatar Airways in October 2015, while the 737 Max will enter service with Southwest Airlines in the fourth quarter of 2017.